MEDIA MEGADEAL: THE CULTURES

MEDIA MEGADEAL: THE CULTURES; A Bridge Builder For Corporate Culture

By AMY HARMON and ALEX KUCZYNSKI

Published: January 12, 2000

When Gerald M. Levin, Time Warner's chairman and chief executive, urged the assembled press corps earlier this week to look at the body language among the executives on stage as proof of how harmoniously his company would blend with America Online, the row of men in the spotlight fidgeted in uncomfortable silence.

Then Robert W. Pittman, president of America Online, leaned back and put his arms around his Time Warner neighbors. If the gesture did not necessarily provide assurance of a happy cultural mesh, it did draw laughter and managed to defuse an awkward moment.

Mr. Pittman, 46, once a high-profile figure in New York's elite media scene who began his corporate career running the Movie Channel at a predecessor company to Time Warner, now carries around a Libretto notebook computer and conducts business through America Online's instant message feature. With a foot in both worlds -- and an affinity for the limelight -- he is expected to be a key figure in stitching together the old media with the new.

''Think of me as a forward scout,'' Mr. Pittman said yesterday from Palm Springs, Calif., where he and Richard D. Parsons, who are to share the job of chief operating officer at the merged company, to be known as AOL Time Warner, were speaking to a group of investment bankers from Salomon Smith Barney. ''The truth is these two companies are a lot alike. What we both think about is the consumer, what are people doing, and how do we serve them and create new value.''

Indeed, by most accounts, the two companies are more similar than they appear.

America Online has long fancied itself a mass-media company, and many of its top executives have been drawn from the ranks of traditional media companies. The people who run Time Warner's entertainment properties, particularly in Los Angeles, pride themselves on being quick to make deals. And the dress code has relaxed even at the company's more buttoned-down editorial offices in New York, where 10 years ago men were virtually required to wear ties.

Apparently, Time Warner has casual dress five days a week, one America Online senior executive said yesterday with some relief.

Indeed, at AOL this week, the buzz held that the merger with Time Warner would be easier than had been that with Netscape Communications, the Silicon Valley software company America Online acquired in 1998. Many of Netscape's star programmers have since departed.

Time Warner executives in turn said they expected the merger with America Online to run far more smoothly than Time Inc.'s notoriously prolonged integration with Warner Communications after they merged in 1989 to form Time Warner.

''These are Dockers guys,'' said a senior executive at Time Warner from the Time Inc. side of the business. ''Latte-drinking nice guys. These are not Hollywood killer types.''

Still, the melding of an Internet company at which jobs change weekly and employees are compensated largely in stock options and a corporate hierarchy known for its devotion to tradition may encounter some difficulties. At America Online, where instant messages hyperlinked to the company's stock price flit across computer screens all day, there was off-the-record dismay yesterday at the performance of the company's stock, which closed down $6.75, at $64.50.

At Time Warner, there was a David-and-Goliath issue, the sense that an august old-media institution had been felled by a smaller, more agile competitor. ''There is a recognition that new media is big, that this is a sea change, that this is momentous,'' said one executive, who insisted on anonymity. ''And somehow this company with a fifth of our revenues and far less cash flow came along and took us over. We've seen it before. How did WorldCom buy MCI? But it's a little different when it happens to you.''

Time Inc. was once a company that embodied a certain Ivy League gentility. In the 1950's and 1960's, after the editors closed an issue of the magazine, a waiter brought a cart with wine and hard liquor for a celebratory toast. Now, some Time Warner executives believe that the merger with Warner Communications 10 years ago and the ascension of Mr. Levin has brought about a certain anodyne quality, almost a neutral environment.

There is no drinking in the office. The headquarters building at Rockefeller Center in Midtown Manhattan is a big, rather bland monolith. A nest of wires runs along the ceiling of the Time magazine offices, and in the right frame of mind can resemble the corporate environment portrayed in the 1985 movie ''Brazil,'' which satirized a post-apocalypse corporate culture.

One Time-Warner executive said that Mr. Levin purposefully affects a mien of utter calm. ''He has had a charisma bypass,'' the executive said. Mr. Parsons, he added, is a consummate politician, even-handed and almost benign in his ability to assuage demands and dented egos from all sides of the Time Warner corporate edifice.

By contrast, at AOL's headquarters next to Dulles Airport in the Washington suburbs of Northern Virginia, the company's chairman and chief executive, Stephen M. Case, not long ago held regular beer parties on Friday's, and Mr. Pittman has weekly staff meetings that are often raucous. Built on a sprawling site that was once a British Aerospace hangar, America Online's headquarters consist of two glass creative centers referred to as CC1 and CC2. Whether an art director at InStyle, Time Warner's successful new celebrity lifestyle magazine, would consider the work done in them to be creative is unclear.